The government is expected to reduce the super tax for the manufacturing sector as part of its forthcoming industrial policy, with the intention of gradually decreasing the rate to 5% over the next four years, contingent upon approval from the IMF, sources informed Dailypakpro.
Sources indicate that the super tax will be entirely eliminated in the fifth year, provided that the primary balance remains in surplus.
The draft of the new industrial policy, which is expected to receive approval from the federal cabinet later this month, encompasses several significant measures aimed at enhancing the manufacturing sector. Among these measures is a proposal to raise the minimum threshold for the super tax from Rs. 200 million to Rs. 500 million.
The policy draft proposes increasing the threshold for the imposition of a 10% super tax from Rs. 500 million to Rs. 1.5 billion. This initiative is designed to alleviate the burden on smaller manufacturers while ensuring that only larger entities are subject to the super tax.
Additionally, the policy outlines strategies to revitalize struggling industrial units and rationalize tax rates for the manufacturing sector. A bankruptcy framework will be established to facilitate the restructuring of failing businesses, while credit facilities will be offered on more favorable terms to support manufacturers.
To attract investment and enhance exports, the policy includes measures for safeguarding investments and improving the competitiveness of the manufacturing sector in global markets. These initiatives are expected to foster a more conducive environment for industrial growth and economic development.
The new industrial policy, which seeks to tackle long-standing issues within the manufacturing sector, is scheduled to be presented to the federal cabinet for approval within the current month, pending IMF approval.
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